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Editorial: Longview made right choice on managing payday lending industry

March 2, 2016 at 12:45 a.m.


In a close — and tough — decision, the Longview City Council voted to enact an ordinance that will put some controls on payday loan businesses in our city. These are businesses that make money — often big money — from a segment of our society that can least afford it.

The council majority made the right choice.

The new ordinance will not put payday lenders out of business, though perhaps they will make a bit less profit. It could, however, keep individual borrowers from sinking deeper into the morass of poverty.

Of course the ordinance will not solve the problem of poverty, but it promises to slow an aspect that can make it worse.

This could not have been an easy ordinance to support as it drew fire from business owners across the city, a group whose members have clout and the ability to help finance an opponent for a council member who goes against them. Yet District 4 Councilwoman Kristen Ishihara, who introduced and pushed the ordinance, was joined by District 1 Councilman Ed Moore, District 2 Councilwoman Nona Snoddy and District 3 Councilwoman Kasha Williams. All had the courage to stick to their positions to protect their constituents.

While payday loans often involve small amounts, they usually end up creating a pile of debt for unsuspecting borrowers through sky-high interest rates on loans that roll over quickly. Consumers who aren't able to make full payments take on debt and fees they can't repay. Eventually, such financial troubles hurt neighborhoods and can keep working-class borrowers from a better financial future, a point Ishihara and other supporters made well as they campaigned for passage.

Having said all that, we acknowledge some of the concerns put forth by Mayor Andy Mack about government intrusion into business practices. All sorts of governments need to be careful about how far they go and any restrictions should be based on what is best for the public.

We believe that is the case here, just as it is in ordinances on restaurant health inspections and building codes. All such rules restrict what a business can do but are necessary. When proposed, we imagine they also were opposed by business owners who said they were too intrusive.

Now that the payday lending ordinance has passed, we suggest those who voted for it should keep an eye on how it affects both payday lending businesses and those who use their services. There may be unintended consequences none of them considered. If so, those should be addressed.

We understand people sometimes need short-term financial help to get through a tough spot. But a loan that perpetuates crippling debt is a bad deal. Longview's ordinance promises to make the transactions a bit more fair to consumers. That's the right move for our city.

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